Hi, I know there are lots of questions and answers on this topic but just trying to find the right solution for me.
I am married and me and my wife have our own joint home
Before marriage I bought a BTL property which has been rented out for about 10 years, both the property deeds and the mortgage is in my name only. Nothing in the wife's name
Property value is about £250k. Mortgage is Interest Only, and outstanding balance is approx £120k.
I am a high earner, so I pay 40% on all Income on this property. My wife on the other hand, works a few days a month, so very low earner
Understandably, I would like to show majority, if not all of the BTL income as received by her
This is what I was planning to do before I started looking into Declaration of Trust.
Ask mortgage company + solicitor to change mortgage deeds / property deeds / land register, etc to include both me and my wife as joint, currently its just me
Ask for Tenants in Common drafted at the same time so that ownership of property is say 99% wife and 1% me. This way I would do a tax return both for me and my wife, but 99% property income showing on wife's return and only 1% on mine.
The mortgage interest payments would also be split in that proportion
This is where maybe you can help
Use a Declaration of Trust to show that my wife is 99% beneficiary of the rental income
So I don't have to change the mortgage deeds, I don't have to change property deeds, etc ?
I don't have to inform HMRC about this change? However, my wife doesn't currently do a tax return, so I will have to say something to them so that they set up her up on their system?
So from the date of the DOT, I can start doing the tax return and include my wife as earning 99% of the income?
Can I still apportion the mortgage interest payments 99%/1%?
Are these actually 2 different options or do I have to do Option 1 and then do Option 2.
Apologies for all the information, but I always think better to have more than less, to be able to make an informed decision